December 1, 2007 (Vol. 27, No. 21)

Vicki Brower

A Plethora of R&D Institutes and Companies Drives Growth in Metropolitan Area

If big is the word that best describes Texas, the same word would also describe its rapidly growing biotech sector, and nowhere in Texas is biotech bigger than in Houston. Texas is a leader in biomedical research spending, and Houston accounts for 67% of those research dollars. In 2003, Houston’s public life science companies had over $2.6 billion in market capitalization.

These days, the medical center skyline rivals and will soon surpass that of downtown Houston. Home to 75,000 professional life science jobs, the medical center expects to add another 50,000 new positions over the next few years to keep pace with its booming growth. Due to strategic planning, an influx of venture capital, heavy recruitment of top-notch professionals, and intensified technology transfer, Houston is currently undergoing a second wave of biotech growth.

Houston is building on longstanding excellence in cancer, cardiovascular medicine, genetics/genomics, and nanotechnology. Veteran area biotechs—Tanox, Introgen, and Lexicon Pharmaceuticals—have matured, and new biotechs are being spun out from the city’s top research and treatment institutions including the University of Texas Health Science Center and the M.D. Anderson Cancer Center, Baylor College of Medicine, Rice University, and Methodist Hospital, which, with other biomedical institutions, comprise the medical center area.

The city has long attracted scientists for training who then decide to stay, says Richard Willson, Ph.D., professor of chemical engineering, biology, biochemistry, and biomedical engineering at the University of Houston and founder of a number of biotechs. “Houston is a good place to live; the cost of living is one-third of that in San Diego.”

Houston is well-known as a probusiness, entrepreneurial city that is hospitable to risk-takers, notes Dr. Willson. A wildcatter attitude has helped energize the growth of its technology and biotech sectors over the past two decades because its business leaders understood the need to diversify beyond petrochemicals, says Jeff Moseley, president and CEO of the Greater Houston Partnership (GHP;, a business advocacy group founded 20 years ago. The GHP’s 10-year plan, developed in 2005, includes over $1 billion in R&D funding for new technologies.

Entrepreneurial Environment

The city’s first biotechs emerged in the early-to-mid 1990s. With 12 public companies and numerous private ones by 1995, venture funding slowed down, and no new companies were formed until 2000, the year in which Tanox and Lexicon posted the two largest IPOs at that time: $213 million and $220 million, respectively.

“Paradoxically, the nationwide slump in biotech that followed did not affect Houston,” explains Jacqueline Northcut, president and CEO of BioHouston (, which was founded in 2001 to facilitate biotech commercialization from the area’s academic institutions.

There are currently 120 life science companies in the greater Houston area, up from 60 three years ago, with 15 of those founded in the past 18 months. About one-third of the 120 companies are developing medical devices, and one-third are focusing on drug development.

Incubating Biotech

As approximately one-half of the Houston life science firms have 10 or fewer employees, BioHouston established an incubator in 2006, the BioHouston Resource Center (BRC), which is located within the new Genesis Biotechnology Park south of the medical center. The BRC offers fledgling companies shared wet labs and the expertise of freelance scientific consultants. Start-ups include Halsa, Mithragen, Regenetech, Visigen, Sentorix, and PLX Pharma.

Founded in 2002 with technology developed at the nearby NASA Space Center, Regenetech ( grows adult stem cells with minimal differentiation in simulated weightlessness and has related research programs in diabetes, orthopedic tissue regeneration, and heart disease as well as sponsored research agreements with two Texas universities and Johns Hopkins University.

New Financing Sources

“Houston had been underserved in incubator space and in capital, but that is changing,” says Dr. Willson. The GHP is fostering biotech growth with its initiative to attract investment from South and Central America and Mexico.

“We are also focusing on homegrown venture capital,” says Moseley. In 2005, Texas Govenor Rick Perry established a $200 million Emerging Technology Fund, about half of which is devoted to the life sciences. More recently, Dan Watkins, Ph.D., of Nanospectra Biosciences and a cofounder of the Rice Alliance for Technology and Entrepreneurship, founded DFJ Mercury for Texas-based seed and early venture capital investments.

Translational Science

The mission of the M.D. Anderson Cancer Center is also big. “Our goal is to eliminate cancer through research, patient care, education, and prevention,” says president John Mendelsohn, M.D., a pioneer in mAb research and inventor of Erbitux, an epidermal growth factor receptor inhibitor developed by ImClone. “It took 24 years to develop Erbitux from concept to approval; my goal is to shorten the drug development process,” adds Dr. Mendelsohn.

Under his direction since 1997, M.D. Anderson Cancer Center, which has a $2 billion/year research budget, has more than doubled its space and faculty and tripled its employee head count. “We encourage a culture of collaboration in translational research, which rewards both individual excellence and teamwork,” notes Dr. Mendelsohn.

At his initiative, the faculty mapped out six interdependent areas of research, each with its own campus, building, and director—metastasis and tumor-environment interaction; immunology; molecular markers; proton therapy; imaging; and development of targeted therapies. Ground was recently broken for the last building. Now in planning are additional research centers for epigenetics, macromolecular structure and function, genetics and genomics, inflammation and immunity, stem cell and developmental biology, as well as environmental carcinogens.

But M.D. Anderson Cancer Center is more than a research center. Each year, it treats 79,000 patients, including 27,000 new patients, and conducts clinical trials in 10,000 patients, which makes it one of the nation’s most valuable resources for clinical cancer research and a draw for researchers.

With $400 million in funding, Methodist Hospital, formerly affiliated with Baylor and now affiliated with the University of Houston, is currently in the process of building a new research institution and hiring scientists. It expects to draw considerable talent from the University of Houston.

The Brown Foundation Institute of Molecular Medicine (IMM) at the UT Health Science Center, directed since 2006 by renowned geneticist Thomas Caskey, M.D., is developing genetic strategies to treat complex diseases in interdependent research centers. It is focusing on stem cells, protein chemistry, neurodegenerative diseases, nanomedicine, human genetics, immunology and autoimmune diseases, cell signaling, and cardiovascular diseases.


Informal and formal collaborations between academia and industry are common in Houston. Nanospectra Biosciences ( is developing AuraShell nanoshells to detect and treat cancer. The company’s AuroLase cancer therapy delivers them via near-infrared laser to selectively kill solid tumors and blood vessels by thermal destruction from within. It has an agreement with M.D. Anderson Cancer Center and expects to start its first clinical trial this year.

The IMM’s population-based sequencing of human genetic variations complements Lexicon Pharmaceuticals’ ( mouse knockout approach. Lexicon’s work on the lipid-lowering effects of antiangiopoeitin-like 4 (ANGPTL4) antibody supports IMM’s ANGPTL4 human research, which shows that this variation reduces triglycerides and increases HDL.


Mauro Ferrari, Ph.D., director of the IMM’s Center for NanoMedicine, was recruited nearly two years ago from the NCI where he led the Alliance for Nanotechnology in Cancer. With joint appointments at Rice University and MDACC and UT Health Science Center as well as being president of Houston’s Alliance for NanoHealth, Dr. Ferrari chose Houston because of its network of biomedical institutions and strengths in nanotechnology.

At the IMM, Dr. Ferrari leads a 60-person interdisciplinary team that will bring nanotech into the clinic for cancer, cardiology, diabetes, and infectious diseases by combining nanoengineering, mathematical modeling, and biomedical sciences.

“Our goal is to address a number of significant weaknesses in cancer detection and treatment, the quadruple problem of identifying different molecular targets, avoiding all biobarriers, delivering one or more cancer cell-killing modes, and personalizing therapy,” he says.

Dr. Ferrari is developing proteomic nanochips that will detect extremely low levels of proteins of interest that have been undetectable in serum and also designing intelligent implants for controlled time release of therapeutics using nanochannel technology. He recently started a biotech company, Leonardo BioSystems, to develop cancer therapeutics carried by multistage nanoparticles.

Veteran Biotechs Evolve

An early gene therapy company, Introgen Therapeutics (, was founded in 1993 by M.D. Anderson Cancer Center’s Jack Roth, M.D., and David Nance, the company’s president and CEO. Using two viral gene delivery systems, Introgen has eight anticancer therapies in development, which employ an oncolytic virus, a variety of genes used as tumor suppressors and immunotherapies, or a nanoparticle formulation. Its lead, Advexin, is being tested for head and neck cancer.

In September, Introgen began a Phase II trial in metastatic small-cell-lung cancer with INGN-225, a p53 tumor suppressor used to stimulate dendritic cells. It also reported results from multiple Phase II trials showing a statistically significant correlation between abnormal p53 and tumor response in patients given Advexin with head and neck, lung, prostate, or Li-Fraumeni cancers.

Another Houston-area veteran, Lexicon Pharmaceuticals, recently moved into a second phase of development, from genetics and fee-for-service to developing small molecules and antibodies. This year, the company changed its name from Lexicon Genetics to Lexicon Pharmaceuticals to reflect its changed mission. Founded in 1995 by Arthur Sands, M.D., Ph.D., Lexicon is examing 5,000 pharmaceutically significant human genes (G-protein coupled receptors, kinases, ion channels, other key enzymes, and secreted proteins) by analyzing the corresponding knockout mouse models.

“We have completed our physiology- and behavior-based analysis of about 80% of these 5,000 genes and have identified and validated more than 100 in six therapeutic areas: diabetes and obesity, cardiovascular disease, psychiatric and neurological disorders, cancer, immune system disorders, and ophthalmic disease,” reports Dr. Sands.

“Using our gene trapping technology to create the OmniBank library of over 270,000 embryonic stem cell clones, we can generate knockout mice at a significantly higher rate than is possible using other methods, which provides us with a strategic advantage in the discovery of in vivo gene function and identification of novel drug targets,” adds Dr. Sands.

Another indicator of the maturing Houston biotech industry is Genentech’s recent acquisition of Tanox, with which it developed Xolair for asthma, for $919 million, says Nancy Chang, Ph.D., former Tanox CEO who recently moved to OrbiMed Advisors. “There is much greater infrastructure in Houston now as compared to 20 years ago, when it was a second cousin to the oil and gas industries.”

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